directors appointment

[jantra]

You are failing to get your head around the question of who breached what obligation. As David and I see it, the director in question was appointed by shareholders.

that is what I am trying to ascertain. I am aware the director was appointed by the shareholders. As I see it:

any shareholder who expects the director to be appointed after failing to gain shareholder consent would be in breach; and
the board of the company had no obligation to follow the shareholders so by acting as it did put itself in breach of the contract it had signed.

Your guys' lawyers will have fuller details, and are advising.

i know that, i'm just trying to ask the silly questions here to get a better understanding of the issues.

[atticus]

I doubt we can take this much further.

I exoect your guys' lawyers will advise on the best means of achieving their objectives.

[jantra]

DLS/Atticus

Thanks both for taking the time to respond.

Regards
Jan

[dls]

any shareholder who expects the director to be appointed after failing to gain shareholder consent would be in breach; and
the board of the company had no obligation to follow the shareholders so by acting as it did put itself in breach of the contract it had signed.

No. The appointment was valid under the articles and is therefore valid. That it might later be set aside is of no significance. Whilst he is a director, he is a director.

[jantra]

any shareholder who expects the director to be appointed after failing to gain shareholder consent would be in breach; and
the board of the company had no obligation to follow the shareholders so by acting as it did put itself in breach of the contract it had signed.

No. The appointment was valid under the articles and is therefore valid. That it might later be set aside is of no significance. Whilst he is a director, he is a director.

i think we are at cross purposes here. I have taken on board your earlier comment about the outside world being reliant on the articles ergo the appointment is valid until it is no longer valid.

the breach gives rise to claim that if proven can be remedied. if that remedy is the removal of the director then the director remains a director until that time.

[atticus]

That is pretty much it.

[jantra]

having met with counsel it would appear as if there is sufficient evidence in the way the company has been run that the SHA forms the constitution of the company. In which case the appointment will be void and any decision taken by the board will also be void.

that is far more than I was hoping for.

[jantra]

the wheels of law turn slowly.

we have finally met with Counsel who has indicated that, post analysis, that all of us have s994 claims against all 3. Now our solicitor indicated at the outset the cost of bringing a petition would be between £10-20k and the cost of a derivative claim upwards of £30k. However, Counsel has indicated we can expect costs in the region of £150-200k in bringing the s994 action.

The other side have indicated a willingness to settle now (a bird in hand etc) however if the deal is not done soon enough then 4 of the 6 are fully prepared to go to court to achieve a fair settlement.

I am meeting with solicitor tomorrow to discuss the meeting with Counsel so I'd just like to garner opinions on here from those who have either brought or acted in a s994 petition. Typically what sort of costs would you expect for such a petition and how long would such a claim take as Counsel has indicated a two year timescale.

[atticus]

Your barrister is nearer the mark.

The last one I did settled after 15 months, with costs on track to exceed £300,000. It was a big case, we used a top QC, and his fees were eye watering.

[jantra]

Thanks for the prompt response. between our solicitor and counsel we have a good legal team, that is for sure.

one final question, did the costs form part of the final settlement?